I’m being forcefully kicked from my own company

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Let your lawyer decide on the strategy, that's literally why you hired them.

Shutting down a business & restarting it under a new name is incredibly hard. 

New website. Can’t share resources or commingle data. Can’t really have the new business benefit much from the prior one without risking courts arguing this was a purposeful way for them to try & sidestep a lawsuit.

I would be so upset to not only lose my friends, but to have them act as though my contribution isn't worth paying out fairly. Either these are wildly unethical people or they must think you've been freeloading

Didn't you have a shareholders agreement? Typically this type of situation is spelled out in detail. For my partner and I, we have a shotgun clause. Where if he offers me a value for my shares I have a defined period where I can match and take his shares. Also we put in that the offer cannot be lower than fair market value determined by a third party business evaluation professional. This protects either of us from the other taking advantage of in low liquidity life events.

No longer your friends, sue the living crap out of them until they bleed out

how much did you invest in exchange for that 25%? the company is valued at 3 million, with $450k profit in 2023? based on what? you said you have no assets, and since its online, no overhead costs. you said it doubled every year for 6 years, and 450k in 2023? how were the profits re-distributed year after year? not sure how you figure a $3million valuation, unless your using some ebitda multiple forumla, but that won't hold up especially since you have no assets, unless your contract honors crystal balls.

Throw my name into the "make sure you have a great lawyer and trust them," bucket, but I'll add something:

They already have that customer list. Trust me. They downloaded that thing and all its details before they asked you to leave. Whatever the most evil thing you can imagine they'd do (drain the bank account, copy the training programs, take the customer list, etc.) is already being done, legal or not.

The lawyer should be able to determine what the legalities are based upon your corporate bylaws.

Let your lawyer do the work. Of course they are going to lowball you.

Your asset is the domain name and brand. They can't very easily recreate that even if they're the face of the company.

How do you know this guy isn't already trying to siphon business and possible reason for the slower activity?

Do whatever your lawyer tells you. Don’t act without consulting them first.

I had a similar story happen to me, no longer going into business with friends. Ended up losing a lot of money and the previous founders just sold the company once I was out.

Hire a business-evaluation third company to estimate the value of the business and ask them the 25% of that amount, not a penny less. If they disagree, go to the courts with that valuation in your hand

I'm going through something similar. Few things:

• Depends on your operating agreement. They may be required to buy you out, they may be able to vote you out via a majority, whatever they are legally able to do is defined by that agreement. So your options really depend on that and you do need to ask your attorney.

• Starting a new company and leaving you high and dry would likely be a breach of fiduciary duty, possibly even fraud, and you'd have an even bigger legal case against them at that point.

• So, unless you do something that violates the operating agreement, it's very difficult to remove you as a member. Their best bet is to buy you out, so they are using bullying tactics to try to get you out as cheaply as possible.

• I would continue fulfilling my duties to the fullest, documenting absolutely everything you possibly can. Do nothing but let the lawyer be your voice on that matter.

• If they want to buy you out, they are welcome to hire a 3rd party business appraiser to do a valuation on the company and then provide a fair market value for your 25% share. They can then buy you out for this. If they do not want to go this route, they are going to end up having to attempt other tactics to push you out via litigation which will likely cost them somewhere in the six figure range regardless.

• Buyouts don't have to be a lump sum, maybe with an initial larger payment, sure, but you could negotiate let's say $100k down and $600k over the next couple of years.

• Go for the maximum valuation you can. They are preying on your weakness, they want you to accept less. It's just a nasty business tactic.

Let the lawyer do the work, but you fight for every percentage and dollar you can get. I would hang on for residuals. You were a founder. I'd want a permanent piece of the profit, even if it's like, 1% annual and then 10% of sale profit. 

That’s CrossFit for you.

Sorry to hear it man! Business is nasty! I have taken over my father's business. He was betrayed by his long term friend who ran one of the branches and also by his damn brother. Money does horrible things to people. Listen to your lawyer and don't back down!

Harsh. Don’t go into business with friends unless you’re ready to lose them

Why would you have business partner without a shareholder agreement? I hope the next venture you will wright one down

This is what partners get you. I’d fight like hell and I’d never have a partner again.

If you're company is structured as an LLC, they'll have a tough time getting rid of you without cause.

I went through something similar with 2 partners many years ago. We were in startup mode and just launched our service. Similarly, we had no assets. I took a lump sum payment + a % of monthly sales for 36 months. The business collapsed after 15 months.

I'd look at a lump sum up front (small, but affordable to the company) + $4k/ month for 60 months. Have them personally guarantee payments which prevents the company from shutting down and stiffing you. For them to screw you, they'd each have to file personal bankruptcy.

Best of luck.

These are the dangers. This is one reason I prefer to own and operate my own company. Without partners and total equity.

I am in kind of the same deal, except I am trying to get two partners out of 4 out because they stopped doing work all together, didn’t pay bills and a bunch of other stuff. They are trying to get a bunch of money out of me for the business they haven’t done a thing in for almost a year now.

It’s hard to get rid of bad business partners.

Can almost guarantee at least one of your business partners has seen this thread. You’re not the only one who knows about reddit

Legally, they cannot shutdown, shift assets to a new company and keep going.   The new company would have to buy the assets at fair market value which include the customers.  You'd have to be paid 1/4 of the proceeds but you'd also have to agree to the sale.

Hire an attorney to value the company so the partners can buy you out.   The company is worth more than just yearly profits.  Your are probably looking at 6 times that number.  

Your attorney should already be telling you this but get a business valuation done by a firm that offers them and sue them for that amount

Making some assumptions about the business itself because you didn’t share much.

It says a lot that you feel they could simply shutdown the LLC and reconstitute it without you and get right back in business.

Sounds like the revenue is earned every day by the work of the people in it. Is that $450K banked after salaries, or what you pay yourselves as salaries or issued as dividends? I don’t understand how a services company with $450K profit (close to that in revenues?) could possibly be worth $3M. Maybe you’re not accounting for assets the company and you (25%) own like social media channels, customer lists, paid subscribers or media assets? IP like diet and training programs developed by the company? They can’t necessarily just take all that and start over.

The best option is probably to try to understand and address the issues. Why do 2/3 of your partners feel you should go and one is willing? Interpersonal issues? Do they think you add insufficient value in your current capacity? Are they right? Ask yourself what will happen to the business if you leave. Do they realize the importance of what you do?

I suppose a lawyer could try to negotiate more of a buyout assuming the company even has cash to pay it. Or maybe a residual “silent partner” share of the profits.

Don't walk away empty handed. If the company is valued at $3m and you own 25%, make sure to get your $750k.

Listen to your lawyer, but if they aren't doing their job, get a new attorney.

Your 2nd to last paragraph is all you need to know. A lawyer can guide you through this but won’t be able to fix it. The company doesn’t have anything truly unique linked to it. No matter what happens you will get screwed, unless you mend those relationships.

Just listen to your lawyer

Tough spot, friend. Lawyer up and negotiate hard.

Why not replace the “face” of the company?

There are provincial or state laws that protect minority shareholder oppression, and the majority shareholders and directors have a legal fiduciary obligation to protect the majority shareholder rights.

One solution might be to accept their valuation of your shares at $25K and counter offer to purchase the rest of the company for $75K.

So you have the formula, and you participated in the creation of the company, correct? Be mindful when you exit about not signing anything that may restrict you from re-entering the business. Ask yourself this. Do you need anyone to run that business you were formally helping to operate or that you had invested in?

What would it take and how long would it take to spin up a similar operation? Did you sign any restrictive agreements or partnership agreements or anything similar? I would consider a strategy to re-enter the game and put them under. I’ve done it before. Two partners who embezzled cash from me. One of them died a decade ago and the other one is on a second round of probably more than eight felonies at this point.

They did you dirty I would consider putting them under the legal way. And through competition.

And in fact, if you’re interested, at least reach out to me privately because I would like to hear more about what business you were in exactly.

How much does it take to spin up a similar operation? And if you identified any opportunities that they haven’t that you’ve kept to yourself?

You signed a operating agreement on a 3 way equal split with no other voting protections for things like removing a member?

It sounds like they can remove you. Your operating agreement governs what happens and defaults to state statutes when its not covered in the contract. Read the contract and let a lawyer handle it I guess.

As, others have said a lawyer will help you understand the partners agreement and the parameters under which partners can be added or bought out. However the lawyer can't necessarily tell you what stance you should adopt with your partners.

The main question to deal with is valuation. If they are offering $25k, then they are valuing the company at $100k.

How was the $3m value arrived at? What is the profit over the last few years and is it growing? If it's mostly personal services, then is it like a dentist or a legal firm, where partners bring in revenues and also take a proportionate part of the profit? Look for comparable valuations to arrive at a reasonable number.

Have faced a similar situation. As far as pushing for value, your lawyer should be able to tell you if there’s a Successor Liability law in your state. In Washington a company that dissolves and reforms with “substantially” the same personnel, doing “substantially” the same business to avoid a debt is still liable. My ex-partners are finding this out the hard way.

There inherently is a lot of value in the intellectual property you created and may have significant value going forward. It is owned by the company (and hopefully registered accordingly) For that, I would not sell for $25k. If your lawyer does not have a good background in IP law, I would fine one that does or get a separate consult to assist in strategy

Company valuation in most industries is generally 3 times average if net income for last 3 years.

If you have a wife I wouldn't be surprised if he's sleeping with her and your going to have to deal with another betrayal best of luck op

A good lawyer will jump ahead of them and freeze assets before they can use them for a start up until it's settled. Quietly let them do their job.

Your operating agreement, if you have one, tells you what to do in this situation. Listen to your lawyer and get it done, however be careful you don't spend more for legal fees than the money you receive.

And don't forget you can get a judgment against somebody for gillions of dollars but you have to collect that judgment

Hi. Please read this it will help you and this guidance is offered to you completely free. I just want to help.You have a lawyer to guide you what your legal rights are. Here are a couple of things to remember, your lawyer is only human and can make mistakes or look for the easy road so after he sets the plan go get a second opinion from another lawyer, it's worth the money. The first lawyer need not know. Also make sure any lawyer you use carries mal practice insurance sometimes also referred to by the lawyer as errors and omissions insurance. Believe it or not some states like California don't require a lawyer to carry it but if they screw up you may have no real recourse against them. Get everything including representing from your lawyer, always have a paper trail. Finally remember the law is not on your side, it is on nobody's side, the law is tricky and lazy. The only one guaranteed to be looking out for you is you. Trust me, I have been there. I am assuming you are in the U.S.A. if not laws are surely different from country as they even are from state to state. If I could help you further reach out, and if you want me to call you to discuss I will. I am in NO way looking to charge you and I am not a lawyer just a business man with lots of experiences willing to help someone not get screwed. Perhaps the other three partners figure they could do it all without you and a three way split is better than four. Money corrupts the best of friends, family, even those hired to protect you and enforce the laws. Lastly, and this is often difficult, keep your emotions out of it. This is about money and that is what is measured and what is motivating everyone else for sure. Good luck!

Craigs a jerk.

You probably don’t have to sell. Do you have a shareholders agreement?

Op about to turn into the green goblin

That is then important of an Operating Agreement. And good accounting 🧾

"3 friends and me created an online training company" & "We all own 25% of the company"

without even reading the whole thing, this business was start up to fail. Equal share = failure company.

See if you can come up with money x 3 they are offering and buy them out and just hire new face. You may loose 15-20% business but if you are determined, you will gain new business. Everyone is replacable, even owners. If they are not ready to sell, start looking into day to day business. You don't want them advertising their new business if you don't sell.

Do you have a shotgun close in your agreement?

It's a lot to restart a company... They can threaten to do that, but it would take them significant time while you would get to close up shop for whatever profit is remaining if you choose not to pivot.

Have they given you the reason why things have come to this point? Keep every conversation in writing. You mentioned it was a side hustle for you. Did you treat it like a side hustle in the mean time they were putting in mire work then you? Is there a way to quantify your inputs into hour? You said it it an online fitness business and they are the face. Are they making the video teaching themselves and you are a service man behind the scene?

Also title is wrong. It not you company. It is joint partnership and you are being let go. You need to look for a lawyer and accountant team who has experience in partnership disputes.

I am an accountant and I have seen a similar dispute. A client created an online academy that teaches about his main business under a new company. Hired a teacher who had experience with online training. Both equal partner. Man would keep loaning the money into the company. Tescher paid herself from year one no matter the profit(loss). Things got busy she even brought her daughter part time and paid her way more. Once company got profitable and he saw no need for her now he wanted to buy her out. Its been a long dispute for couple years and they both sued each other. Still ongoing.

nickkurtdale?

How us the llc structured? You should be getting 25 percent of the profits each year.

Hold onto your shares. Offer to become a silent partner. Wait for the company to grow, then sell.

25 percent last time I checked means you have no majority

I’m sorry to hear what you are going through. Last year my business partner and I went through a similar dispute with a 3rd partner, though it was him that initiated the separation and us that were trying to find an amicable settlement. It seems unfair that they would not find a reasonable way to compensate you for your equity. Your lawyer will advise you on your legal rights but it will be up to you to decide how aggressive you want to be. The power rests with whomever controls the revenue. Make sure you’ve got as much of that control as you can and wield it. That is your best defense: offense.

There’s to many variables here.

(1) Do you have operating agreements between you all?

(2) Are each persons roles within the company defined via a minimum of a job description (but ideally legal paperwork)?

(3) The two that are the “faces of the company” do they own all intellectual property they worked or were the face of?

In all honesty, you’ve hired a lawyer. What have they told you? Do they have any input? That lawyer should be explaining how these guys can screw you (in detail) and how you can get max value. To be honest, you need to make sure you’ve hired the most experienced lawyer you can, get the most clout possible because this is going to be a tough fight.

If they bail, plan to replace them with new partners and keep the whole thing. Sue then if they try to take your customers.